Economy General Politics

Momentum is Ours

Published by:

By Larry Vaupel
Economic Development Agency Administrator
San Bernardino County

Momentum. Defined by force or speed of movement. Our County is experienc­ing momentum again. It is a speed of positive movement that will benefit us all. However, the challenge is to ensure this positive economic momentum is broad based, hitting all key aspects of our region from healthcare to education to business.

We have population momentum. Ac­cording to economist Joel Kotkin, Cen­sus Bureau data indicates that, from 2007 to 2011, nearly 35,000 more resi­dents moved from Los Angeles County to the Inland Empire than moved in the other direction. There was also a net movement of more than 9,000 from Or­ange County and more than 4,000 net migration from San Diego County.

Healthcare is expanding. Loma Linda University Medical Center recently an­nounced plans for a new construction project that will provide a new building to house the International Heart Insti­tute and establish two state-of-the-art centers for imaging, gastrointestinal, and pulmonary services, allowing for expansion of services and ease of access to accommodate the rapidly growing population of the Inland Empire.

Business is growing. The unemploy­ment rate in San Bernardino County dropped from 7.7 percent in November to 7.0 percent in December of last year, according to data released Jan. 23 by the California Employment Develop­ment Department (EDD). The county’s jobless rate had been one of the highest in the nation during the recession, but it has decreased steadily in recent years. Moreover, to further encourage greater job growth, five companies within the County of San Bernardino were award­ed California Competes Tax Credits totaling nearly $5.5 million for the cre­ation of 1,148 new jobs. The award is from the Governor’s Office of Business and Economic Development (GO-Biz) and approved by the California Com­petes Tax Credit (CCTC) committee. The California Competes Tax Credit is an income tax credit available to busi­nesses that want to come to California or stay and grow in California. These five local businesses were among the 56 companies statewide chosen by the Governor’s office.

Education is meeting demand. Chaffey College was recently awarded nearly $15 million to create an advanced man­ufacturing training center at California Steel Industries in Fontana. According to officials, the grant will provide a ma­jor economic boost since an expected 3,000 students will be able to benefit from the program over a four-year pe­riod, starting mid- 2015.

County government is innovating. We recognize that our role is to facilitate in­vestment and fuel the momentum. It is no small task that our County was rec­ognized in 2014 with multiple awards for its innovative programs from the National Association of Counties and the California State Association of Counties.

On Wednesday, April 15, I encourage you to join me at the State of the County where more than 1,000 business, gov­ernment and community leaders will be on site at the Citizens Business Bank Arena in Ontario. We will share more of what is driving an era of momentum for our region, as well as provide a forum for discussion and collaboration. We in­vite you to help build the momentum. Tickets are available at www.sbcounty­advantage.com

General Water

Science: a Key to Water Management

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By Mojave Water Agency

California’s ongoing drought is just one factor in a complex equation of a changing water environment. With new state groundwater regulations, as well as stricter conservation measures, developing innovative and cost-effective solutions will require more than funding. It will require solid science data that will create greater consensus to develop long-term solutions.

The Mojave Water Agency’s second annual Water Summit turns the focus on “Science: The Key to Managing Water in a Changing World.” The event will be held April 8 from 7:30 a.m. to 11:30 a.m. at the Hilton Garden Inn in Victorville. The event is sponsored by the Mojave Water Agency and the Victor Valley Chamber of Commerce.

The half-day program will feature the Governor’s top groundwater leader, Gordon Burns, Undersecretary for the California Environmental Protection Agency. Burns was appointed by Brown in December 2011 and has been heavily involved in water policy. He has been a leader on the Sustainable Groundwater Management Act—the Governor’s recent landmark groundwater legislation that will provide a framework for local entities to more effectively manage groundwater resources.

The program also will feature presentations demonstrating the use of sound science in developing Urban Water Management Plans that provide critical data for future development. Additionally, the program will explore the role of science in accurately assessing local water supplies and developing new programs for future growth.

The program includes a full buffet breakfast and costs $10 per person in addition to a processing fee. For more information contact the Mojave Water Agency at 760.946.7000. To register for the Water Summit, click here: https://www.eventbrite.com/e/high-desert-water-summit-tickets-15715365080

The Mojave Water Agency manages the region’s water resources for the common benefit to assure stability in the sustained use for its citizens. It is one of 29 State Water Contractors entitled to receive State Water Project water when available. The Agency’s territory encompasses 4,900 squares miles with a population of 450,000.

Economy General Property

Housing the Future: Availability = Affordability

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By Carlos Rodriguez
CEO of the BIA
Baldy View Chapter

The Inland Empire has a severe housing shortage, which if left unchecked will continue to negatively impact the economy by limiting housing affordability, job creation and local tax revenues.

On February 5, 2015, National Community Renaissance hosted a Symposium on the Affordability of Housing and published a study entitled “Housing the Future: The Inland Empire as Southern California’s Indispensable Geography.” Participating in the symposium were local elected officials, representatives from the California Realtors Association, California Apartment Association and the Building Industry Association Southern California, Baldy View Chapter (BIA).

“We need a government that understands that growth is important, that diversity of employment is important, and that housing is important,” said Joel Kotkin, researcher and author of the Housing the Future study. “We need to take care of the middle class, and the last place that’s going to happen in Southern California is the Inland Empire.”

The Inland Empire is home to more than 4 million residents, many of whom chose the area for moderately priced homes. However, that dynamic is quickly changing due to burdensome regulation that deters the development of new residential units. Many middle class families are being priced out of the market due to a drop in new development which has lowered the volume of housing stock below the growing market demand.

“There is a belief that housing is a drain on the local economy. Nothing could be further from the truth,” said Carlos Rodriguez, BIA Baldy View Chapter CEO.

Rodriguez cited research from the National Association of Homebuilders showing that over the course of 15 years, a 100-unit housing project will lead to $13 million in economic growth and $4 million in additional tax revenues for the community. Unfortunately, many cities and counties still regard housing as a detriment instead of recognizing it as a critical economic asset.

“Housing is an economic catalyst, and for Southern California, housing in the Inland Empire is critical to the region’s economic sustainability,” said Steve Pontell, President of the National Community Renaissance. “We (Inland Empire) have long been the place where the middle class could afford to live. As that goes away, so will our employment base.”

Rodriguez and Pontell both noted that California is 1 million housing units short of meeting the current population demand. Southern California alone, needs an additional 600,000 homes to meet the growing demand. With limited housing availability comes limited housing affordability.

In 2005, the Victor Valley pulled 6,408 residential permits, which attributed for over 43% of the total permits countywide. In 2014, the Victor Valley’s 271 permits accounted for only 14% of the total activity in the county. Likewise, construction industry jobs countywide declined 42%, with almost 19,000 construction-related jobs lost since 2006. In that same time period, unemployment in the Victor Valley has increased by 54%.

The “Housing the Future” report reveals several enlightening statistics about the Inland Empire’s market potential. The IE has the second highest concentration of children ages 5-14 in the nation and the most significant increase in Bachelor Degrees and College-educated residents in Southern California.

The study also reveals that California has the highest development impact fees per unit in the Nation (approximately $32,000/unit). That’s twice as high as the next two highest states, Maryland ($16,000/unit) and Oregon ($15,000/unit). A shortage in housing stock is also directly related to unemployment rates, home affordability and a broad tax/consumer base. This begs the question: How will we meet the employment and housing needs of the future if housing availability continues to be limited by increased regulation and dwindling incentives?

The BIA suggests that positive policy reform can be made through the San Bernardino Countywide Vision and Housing Collaborative Element Group. We commend Supervisor Robert Lovingood, the County Board of Supervisors and the San Bernardino County Associated Governments (SANBAG) for leading this timely effort. The goal of the element group is to improve the IE’s business environment and help California families achieve the American Dream of Homeownership.

BIA recently published a Best Recommended Practices Brochure to improve the efficiency in permitting and creating a more business friendly environment at the local municipal level. The brochure outlines five best practices to: 1) Increase Customer Service, 2) Have a Well-Defined Pre-Submittal Program, 3) Improve Information and Communications, 4) Engage Stakeholder in Policy-Making Decisions and 5) Maintain Fees at Reasonable Levels.

For more information and to find links to the “BIA Best Recommended Practices Brochure” and the “Housing the Future” study please, visit www.BIABuild.com

-Carlos Rodriguez serves as CEO of the BIA, Baldy View Chapter, a non-profit trade association advocating to help meet the housing and building needs in Southern California.

Economy General Politics

Change to California Revenue and Tax Code

Published by:

By Brad Golden

Effective January 1, 2015, anyone submitting a document for recording can no longer “hide” its associated transfer tax from the public records by use of a separately attached declaration.

Formerly, Section 11932 of the California Revenue and Taxation Code provided an option permitting that the amount of transfer tax due for a taxable document not be disclosed on public record but, rather, declared in a separate paper attached thereto when presented for recording. Pursuant to Assembly Bill 1888 of 2014 (Chapter 20, Statutes of 2014), effective January 1, 2015, Section 11932 is amended to repeal this option, thereby requiring that all documentary transfer tax declarations thereafter must be included in taxable documents and become part of the public record. Assembly Bill 1888 requires no change in the form or content of the presently used transfer tax declaration.

Assembly Bill 1888 was sponsored by the Appraisal Institute, an association of real estate appraisers, for the purpose of obtaining ready access to transfer tax information and provide much-needed assistance to appraisers. In the past, it was possible to hide this tax amount by simply requesting that the taxes be marked “Filed” thus hiding the transfer tax, and therefore the value of the property declared to the County taxing officials. The Appraisal Institute made contact with every county in the state, and received positive response to the proposed legislation from every county with the exception of one. The bill, carried by Assembly member Phil Ting (D-San Francisco), was passed overwhelmingly in the Assembly and State Senate. The Governor then signed it into law.

While some investors and speculators may be disappointed with this new transparency, it will definitely create better data points for the overall market.

Brad Golden is a Major Accounts Manager for Chicago Title in Southern California. He coordinates commercial and subdivision transactions throughout the region, as well as nationally. He can be reached at brad.golden@ctt.com or 805-218-8879.

General Politics

High Desert Detention Center

Published by:

By Sheriff John McMahon
County of San Bernardino
Sheriff’s Department

The expansion of the San Bernardino County Sheriff’s Department’s High Desert Detention Center continues in Adelanto, with a current total of 2,074 beds, 1,368 of them newly added. Sitting on seven and a half acres, the hi-tech facility’s enlargement has a total price tag of $150 million, with a proportionately hefty contribution predicted to the tax rolls of Adelanto, Victorville, Hesperia, and other surrounding communities.

At the present time there are 199 employees at HDDC, with a payroll of $7.5 million. When the facility is fully staffed, however, employees will number approximately 325. Complete build-out and full staffing is expected sometime in the 2016/2017 fiscal year.

Between February of 2014 and January of 2015, the High Desert Detention Center witnessed 14,802 bookings. The average daily inmate population is 918 persons.

HDDC continues to provide a tremendous measure of convenience for both the San Bernardino County Sheriff’s Department, and for inmates as well, because the presence of the facility eliminates the need for deputies to travel to Rancho Cucamonga to book inmates with medical conditions. Such technological advancements at HDDC as specially coated walls to reduce the spread of infectious diseases, and an onsite dental facility equipped with two stations and an X-ray suite, make it possible to reduce costs associated with inmate health care, and to drastically cut down on prisoner travel time and deputy man-hours spent in transit. Instead of transporting sick inmates down the hill, deputies are now able to stay in the high desert and get back to their assigned area to provide proactive patrolling. Inmates with common conditions like high blood pressure or diabetes are now routinely monitored and treated “in house.”

Funding for the expansion of HDDC has been provided by state monies designated for the construction associated with enlarging local detention facilities. The expansion was made necessary by AB 109, a law which shifted the responsibility of housing some state prisoners from the state to the county in order to comply with a federal mandate regarding prison overcrowding. Governor Brown signed the bill into law in 2011, a move that quickly became known as “realignment.” As a result, sheriff’s departments throughout California have been required to house inmates who normally would have been sent to state prisons. Design for HDDC, however, began in April of 2006, shortly after the opening of the original Adelanto Detention Center.

Other technological highpoints in the design of HDDC include a hi-tech video surveillance system and “video visitation,” which allows inmates a greater chance to visit with family members without all the intra-facility movement of the past: less inmate movement means a safer detention center. Also, a wide variety of rehabilitative programs and services are available at HDDC, which can now be conducted in classes directly within the housing units, cutting down, again, on inmate movement.

Economy General

2014 Report County Residents Receiving Aid Distribution by Cities

Published by:

By Linda Haugan
Assistant Executive Officer, Human Services

County Residents Receiving Aid Distribution By Cities

(Based on data as of January 1, 2014)

This report contains information concerning distribution of CalWORKs (cash benefits), CalFresh (nutrition assistance), and Medi-Cal in the cities and communities in San Bernardino County. The benefit populations refer to persons, not families. The number of persons receiving CalWORKs has remained steady while CalFresh increased 4.2%. Receipt of Medi-Cal increased 20.0%. The increase in Medi-Cal is due to pre-enrollment for the Affordable Care Act, which began October 1, 2013, and the expansion of Medi-Cal.

Exhibit I ranks the cities with cash benefits as a percentage of the general population. The ranking ranges from a low of 0.7% to a high of 13.6%. Exhibit IA displays this information graphically.

Exhibit I

Exhibit I

Exhibit 1A 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit II displays the financial value of assistance, which includes CalWORKs, CalFresh, and Medi-Cal, by assistance category and by total for each city. For example, the annual financial value of assistance in the City of San Bernardino is approximately $750 million. The value of assistance is based on statistics from CalWORKs and CalFresh benefit disbursement and the California Department of Health Care Services.

Exhibit II 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit III displays the population receiving aid by program and in total by city.

Exhibit III 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit IV compares the receipt of cash benefits in January 2013 to January 2014.

Exhibit IV 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit V displays the total number of persons receiving CalFresh benefits by city. This information varies from the totals listed in Exhibit III in that it includes persons receiving CalFresh as a result of their eligibility for cash benefits.

Exhibit V 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit VI displays information on unincorporated areas by ZIP code. Some ZIP codes that are shared with other counties are not included. Information on cells with less than 15 persons or amounts less than $3000 is not included.

Exhibit VI 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit VI Continued 2014 Report County Residents Receiving Aid Distribution by Cities

Exhibit VII displays the amount of child-care funds paid to providers in order to assist those participating in approved Welfare to Work activities. The amounts are for the month of January 2014 and are aggregated by location of the family receiving assistance.

Exhibit VII 2014 Report County Residents Receiving Aid Distribution by Cities

Please direct any requests for additional information or questions about this report to: Brian Pickering, at 909.388.0168.

E-mail: bpickering@hss.sbcounty.gov

General Nonprofits

Are Nonprofits and Businesses Similar?

Published by:

By Debbie A. Cannon
VP/COO
Academy for Grassroots Organizations

At a recent Chamber of Commerce net­working event, I was introducing myself and my role at Academy for Grassroots Organizations when asked “How Are Nonprofits Like Small Businesses?”

Prior to joining the nonprofit sector, I was a small business owner, so I found this a very intriguing question. The net­working event did not provide adequate time to address this thought-provoking question, so I would like to attempt to in this article.

Let me begin by taking a moment to de­fine a nonprofit. The Free Online Dic­tionary defines a nonprofit as: “A cor­poration or an association that conducts business for the benefit of the general public without shareholders and with­out a profit motive. Nonprofit organi­zations include churches, soup kitchens, charities, political associations, busi­ness leagues, fraternities, sororities, sports leagues, colleges and universi­ties, hospitals, museums, television sta­tions, symphonies, and public interest law firms.”

Similar to for-profit corporations, non­profit corporations must file a statement of corporate purpose with the Secretary of State and pay a fee, create articles of incorporation, conduct regular meetings, and fulfill other obligations to achieve and maintain corporate status according to state law.

Although both entities are corporations there indeed are a few key differences. A major point of distinction is in the ba­sic question “Why does each exist?”

For-profit companies are generally es­tablished to generate income for entre­preneurs, employees and shareholders. They offer market-driven products and services in exchange for sales revenue. Profits are distributed to the appropriate shareholders.

Nonprofit organizations are generally established to serve the general pub­lic without a profit motive and without shareholders.

One significant difference between non­profit and for-profit organizations is how they are funded. While for-profit companies sell products and services in the community to generate income for distribution to entrepreneurs, sharehold­ers, the business and their employees, nonprofits generate their income to sup­port humanitarian causes.

Nonprofits generate their income from direct appeals to individuals, corpora­tions and donors and entities that sup­port the underlying cause.

Nonprofit organizations “re-invest” all of their income into programs and services aimed at meeting under-met community needs such as food, water, shelter, education, workforce develop­ment, health, arts and culture that are pillars of a healthy community. Unlike for-profit businesses nonprofits cannot distribute corpo­rate income to stakeholders. The funds acquired by nonprofit corpo­rations must stay within the corpo­rate accounts to pay for reasonable salaries, expenses, and the activities of the corporation/nonprofit.

An inaccurate be­lief sometimes held about non­profits is that they rely solely on charity or dona­tions for income. In fact, the Cal­Nonprofits recent Causes Count sur­vey of 72,478 Cal­ifornia nonprofits reveals that, in fact, nonprofits in the Inland Empire generate 72.75% of their income from program revenues. The diagram below shows the overall rev­enue mix of the nonprofit sector. For the complete report visit http://www.calnonprofits.org/causes-count

Inland Empire Nonprofits –Breakdown of Revenue Sources

Breakdown of Contributions

Breakdown of Contributions

Similar to for-profits, nonprofits actively look for ways to diversify their funding and secure long term financial sustainability One such opportunity presented it­self in the spring of 2014. In 2014 The Community Foundation Serving the Counties of Riverside and San Bernar­dino, in coordination with the County of San Bernardino, launched a 24-hour fundraising web-a-thon benefitting non­profit organizations called Give BIG San Bernardino. The goal was set to engage 150 countywide nonprofits and raise $300,000 online in 24 hours. Training to increase their skills in the use of so­cial media, marketing, and donor culti­vation to prepare for the big day were provided.

The business community provided sup­port through $41,000 in sponsorships. On May 8, 2014, by working together, businesses and 251 county nonprof­its successfully raised $548,214 in 24 hours. Victor Valley and Barstow non­profits raised 5.76% of the total dollars. For information about the participating nonprofits and 2014 Give BIG San Ber­nardino statistics visit http://givebigsb­county.razoo.com

The success of Give BIG is one example that highlights how businesses and non­profits working together can accomplish new and innovative solutions to the pur­suit of our shared vision of healthy and vibrant communities.

I am excited and inspired to explore ways to develop more opportunities like Give BIG for nonprofits and for-profits businesses to find innovative ways to work together for the good of our com­munity. I invite you to attend one of our monthly networking meetings the 1st Thursday of each month to learn more about nonprofits. Email me at Debbie@AcademyGO.com for details.

Stronger nonprofits and stronger busi­nesses are integral to long term success of our communities.

Nonprofits and their employees pur­chase goods and services that boost local economies. This helps local businesses grow, hire additional employees, and prosper. Plus, nonprofits themselves contribute to sales tax revenues as they expend dollars.

Nonprofits, in addition, purchase nu­merous goods and services, including things such as real estate, rental prop­erty, utilities, insurance, office supplies and equipment, financial services and printing, to name a few.

I am confident that working together we can accomplish great things. No doubt there are subtle similarities and differ­ences in both sectors, yet, in the end, there are more similarities than differ­ences.

In response to the original question “How Are Nonprofits and Businesses Similar?” I offer the following quote from the San Bernardino Countywide Vision description of Our Job: “Our job is to create a county in which those who reside and invest can prosper and achieve well-being.”

There is much work to be done to ac­complish Our Job. Let us begin togeth­er!

Debbie A. Cannon is a VP/COO of Academy for Grassroots Organizations, a nonprofit management support or­ganization dedicated to improving the quality of life in our region by support­ing and strengthening the social service sector. Further information may be found at www.AcademyGO.com.

Air Quality General

MDAQMD’s Highest Honor Awarded to Companies

Published by:

The Mojave Desert Air Quality Management District, the local air district which regulates air quality in the High Desert portion of San Bernardino County & the Palo Verde Valley of Riverside County, is more than 20,000-plus square miles and structured in a manner which allows policy on air quality issues to be developed and debated by those who are most affected by it: regulated industry and the High Desert community. Thus, the MDAQMD employs a common-sense, inclusive approach to the development of its air quality management programs. The District’s mission is to attain and maintain a healthful environment while supporting strong and sustainable economic growth.

MDAQMD staff works in a pro-active manner with those impacted by regulatory mandates to find the most prudent and non-punitive course of action and to resolve conflicts to the maximum extent possible. As a result, local industry has more flexibility in meeting environmental mandates than their counterparts in neighboring air districts and even some nearby states.

One example of how the MDAQMD partners with local businesses to help them meet and exceed state and federal emission mandates is its annual presentation of the Exemplar Awards. The Exemplars recognize High Desert entities that demonstrate an exceptional commitment to clean air through the development of voluntary activities/projects that reduce or prevent air pollution within the MDAQMD’s jurisdiction.

In fall of 2014, a family-owned material recovery facility and the Victor Valley’s municipal wastewater treatment plant were recognized by the Governing Board of the MDAQMD, as the District presented its Exemplar Awards to Advance Disposal Company and the Victor Valley Wastewater Reclamation Authority for implementing innovative, energy-saving projects which are revolutionizing the waste disposal process while significantly reducing air pollution emissions.

Advance Disposal was recognized for recently doubling the size of its Hesperia Material Recovery Facility and replacing higher-emitting loading and conveyor equipment with state-of-the art, fuel- efficient equipment, while working to meet the demands of the upcoming 75% state mandated landfill diversion rate set to commence in 2020. As a result, the newly retooled MRF is now able to process the same amount of material in half the time, with a 50% decrease in fuel emissions, since equipment such as loaders, excavators and skidsters previously required to transfer material during the additional processing time are no longer necessary. A tunnel system designed for trucks entering the MRF has helped further reduce fuel emissions and cut in half the time it takes to load landfill-bound idling transfer trucks by loading directly from the floor into the top of the haulers. Advance Disposal also recently added a CNG-fueled refuse truck to its fleet, along with a propane-operated forklift.

VVWRA was awarded the Exemplar for partnering with Anaergia Services LLC of Carlsbad to retrofit a decommissioned anaerobic digester for the purpose of tripling its sludge and waste co-digesting capacity, and using the resulting biogas as fuel to generate electricity and offset natural gas usage at its Victorville plant. As a result, two combined heat and power engines have been equipped with lean-burn technology and are now operating on digester biogas, supplemented by natural gas. The new engines have replaced two of four existing internal combustion engines, which have resulted in an overall reduction of the facility’s nitrogen oxide, volatile organic compound and greenhouse gas emissions. The two remaining combined heat and power engines will run on 100% biogas and be used for backup purposes only. VVWRA also modified its formerly high energy-use UV treatment system to run on a single channel, which has reduced emissions from this source by 60% and further decreased energy demand. The OmnivoreTM project – which was commissioned in January of 2014 – is a developing technology and is the first of its kind in North America. As a result of its introduction, VVWRA is currently producing 1.4 MW of electricity onsite and is expected to be 100% energy neutral by the start of 2015.

To find out how doing business within the MDAQMD could be good for your business, call 760.245.1661 or visit us online at www.mdaqmd.ca.gov today!

Economy General Politics

IEEP Working to Put Inland Empire on California Leaders’ Radar

Published by:

By Paul Granillo

The year that recently came to an end will be remembered as one where the Inland Empire was certainly on the agendas of more people than when the year started.

As the largest economic development agency in San Bernardino and River­side counties, one of our major goals has been and still is raising the region’s profile. To too many of the people in the coastal regions of the state, and in some political locations, California starts at the Pacific Ocean and ends 50 miles in­land.

The Inland Empire Economic Partner­ship worked hard in 2014 to teach the rest of the state that we do not live in “those cities east of Los Angeles,” that the inland Empire is its own region with its own identity. More importantly, it has a distinct set of economic and social needs.

That message can be delivered with strong effect on November 12 and 13 when the California Economic Sum­mit comes inland for the first time. The event, put on by the California Forward and the California Stewardship Net­work, assembles leaders from across the state to discuss economic prosperity for everyone in the state, and it will be held in Ontario this year. Previous summits have been in Santa Clara, Sacramento and Los Angeles.

As Co-chair of the Steering Committee for the Summit, I advocated for an In­land Empire venue. California may be famous for its beaches, lush vineyards and Silicon Valley, but it is made up of millions of working people. This year’s Summit will be among these people, among us.

However, this is just one small piece of the puzzle. To enhance the quality of life, we at the IEEP have worked hard in the past year building relations with elected officials in Los Angeles, Sacra­mento and Washington, D.C.

We believe, as we have for several years, that there are policies that predominate in California which do not consider the economic interests of the Inland Empire. No one in the area is in favor of more pollution or willing to tolerate danger­ous levels of emissions. But a one-sided policy that apparently does not consider the economic survival of millions of In­land residents is a severe problem for us. It is, however, one we now feel we can counter because we now have a place at the table.

Last April I led a delegation of Inland Empire business leaders to Washington and secured what we assumed would be a five-minute talk with U.S. Senator Di­anne Feinstein. Instead, California’s se­nior senator gave our delegation 35 min­utes. The result: an increased awareness on the part of one of the state’s leaders on the needs of the Inland Empire.

Another aspect of political leadership is our efforts to bring the area’s entire Congressional delegation together for an Inland Empire Caucus. Our organi­zation does not take political sides be­cause we recognize that the region has needs that really have nothing to do with party affiliation.

Our region has seen its economy re­bound from the pummeling it took dur­ing the Great Recession. There are about 1.3 million people collecting regular paychecks in the Inland Empire right now, almost as many as eight years ago when the economic struggles began.

But, as some have said, keeping the peace is often harder than waging the war. A lot of work still needs to be done. For one thing, cities such as Victorville, Hesperia and Barstow still have unem­ployment rates that are higher than that of the nation, state and the overall In­ region.

For another, we have to ensure that eco­nomic opportunities continue to happen and that the next generation of jobs is a good one. The IEEP is working with the leaders of Cal State San Bernardino and UC Riverside to help secure new fund­ing that support the schools’ ongoing ef­forts to reduce the time it takes to earn a degree and to make it easier to transfer from a community college. Less than one in five people in the Inland Empire have college degrees, and an underedu­cated workforce is one of the things that discourages next-generation investment in the region.

We are also working with educators and health care groups to make it easier to train a next generation of health care workers, a profession that is expected to be in demand in the coming years.

All told, we have almost returned from a long journey. There is still a distance to travel, but we are going to continue to fight for a better life for all our resi­dents.

Mobility 21 Helps Keep California Moving, In More Ways Than One

California is a place that almost literally grew up on the road. The importance of our car culture is in evidence every­where, and probably nowhere is this as obvious as it is in some of the more remote areas of the region, like the Inland Empire and the High Desert area.

That is one of the reasons I became Chairman of Mo­bility 21, a nonpar­tisan partnership of public officials, civic leaders and the private sector from across Southern California that looks for solutions con­cerning transportation and its related in­frastructure. These are very complex is­sues that affect everyone, from the small manufacturer trying to ship goods to a global market to the person going to the store for a bottle of milk. Transportation is a huge part of the quality of life equa­tion in Southern California.

Mobility 21 is a group that recognizes that our transportation issues have to be solved with 21st Century solutions. Not enough neighborhoods in the High Desert, or almost anywhere in the In­land Empire, have good job opportuni­ties that are only a few miles away from home. The era when a person can leave his or her great job and drive 10 minutes to a great home is probably over. And few people have public transportation options that create a convenient way to get to work or get almost anywhere.

Much of the debate is traced back to the logistics industry, which plays a signifi­cant role in the High Desert’s economy. In the Inland Empire, the goods move­ment industry accounts for more than 10% of all payroll jobs, and puts food on the table for hundreds of thousands of people.

But that industry often finds itself under siege because of an attitude in Califor­nia that looks at the issues of congestion and automotive emissions and tries to fix the problems by trying to slash the Inland Empire’s economic lifeline.

During my tenure as Chairman of Mo­bility 21, we addressed those problems from a responsible direction, one that recognizes that people need to make a living and respects the quality of our lives as well. The group’s summit last September, which was attended by more than 1,000 people, included discussions on new infrastructure investments, de­sign-build contracting and more express lanes across Southern California’s free­ways, among many other issues.

Many of those issues will be advanced when the Inland Empire Economic Partnership, the largest economic de­velop organization in our area, hosts the Southern California Logistics Sum­mit, which will be held on April 23 at the Fairplex in Pomona. A collaboration with the Drucker School of Manage­ment at Claremont Colleges, this is the first time this important event has been held in Los Angeles County, amplifying that these are critical issues to everyone in Southern California.

The IEEP recognizes that transporta­tion is a critical issue. Forums like those established by Mobility 21 ensure that these issues will remain in the forefront of regional discussions and that the so­lutions will benefit all the communities in Southern California.

Paul Granillo, President and CEO, In­land Empire Economic Partnership

General Politics

In the Wake of Redevelopment: New Tools and Collaborative Approaches to Economic Development for High Desert Cities

Published by:

By Larry J. Kosmont, CRE, President & CEO, Kosmont Companies

By Brandon Phipps, Project Analyst, Kosmont Companies

As the Redevelopment dissolution pro­cess continues for the 14 former Re­development Agencies comprising the High Desert Cities region, new partner­ships between unlikely members are forming and new tools for regional eco­nomic development are being explored.

Redevelopment Dissolution Status in the High Desert Cities:

The 14 former Redevelopment Agen­cies, now called “Successor Agencies,” located in the High Desert cities region are: Adelanto, Apple Valley, Barstow, Bishop, California City, Hesperia, Lan­caster, Needles, Palmdale, Ridgecrest, Tehachapi, Twentynine Palms, Victor­ville, and Yucca Valley.

During the past three (3) years since the State-mandated redevelopment dissolu­tion process began, many cities, includ­ing some of the High Desert cities, still have much to do before their redevelop­ment wind-down process is complete. The timeline for winding down former RDAs has, for many California cities, been extended. The Department of Fi­nance’s deadline to review and approve Long Range Property Management Plans (PMPs) is now January 1, 2016, per AB 1963, approved in 2014.

Out of the above 14 listed agencies, 6 have received their PMP approval from the State’s Department of Finance (DOF), 4 are still waiting to receive their Finding of Completion (FOC), which is only the first step in the process, and the remaining 4 are somewhere in the middle, working on their PMP, waiting for the DOF’s approval, or working through litigation.

Figure 1 highlights the status of redevelopment dissolution in High Desert cities:

Fig. 1 In the Wake of Redevelopment

Individual Successor Agencies with­in the High Desert region will need to achieve PMP approval prior to the DOF’s new deadline of January 1, 2016, or potentially be exposed to a loss of control as the unwinding process moves forward.

Once these cities complete the wind-down process, they can begin working on new and existing economic develop­ment assets and implementing new proj­ects of community-wide significance.

High Desert Obstacles and Opportunities:

The cities of the High Desert Region share reasonably comparable demo­graphics in many categories, as well as fairly compatible regional water, sewer and transportation issues. For years the region was hit hard by the recession and has experienced the impacts of dimin­ishing revenues from falling property values, high foreclosure rates, and an unemployment rate that peaked at ap­proximately 16%. These issues, coupled with the loss of redevelopment funding, have created cash flow problems for the area. Although the majority of Califor­nia cities and counties see redevelop­ment dissolution as unfavorable to fur­thering economic development projects, for some regions like the High Desert Cities, there may be a silver lining as follows:

  1. Former RDAs are forced into maxi­mizing the value of their properties by preparing them for development oppor­tunities, primarily through a liquidation or re-use strategy.
  2. Instead of jurisdictions acting as in­dependent RDAs amidst fierce competi­tion sometimes involving closed “nego­tiation” meetings, new and collaborative regional solutions such as “Opportunity High Desert” (OHD) have an improved chance of prevailing.
  3. A new economic development tool called Enhanced Infrastructure Financ­ing Districts (EIFDs) is now available to communities in the High Desert which, with some refinements, may emerge as a viable economic development tool.

“Opportunity High Desert”— Example of Regional Cooperation:

OHD, the region’s newest economic de­velopment marketing entity, which is a result of redevelopment dissolution, is one example of a creative regional so­lution to High Desert funding issues. OHD promotes cross-jurisdictional col­laboration between 5 communities with one singular vision: to market the High Desert cities region to attract and retain business. Apple Valley Town Manager Frank Robinson spoke on OHD and re­gional collaboration expounding on the fact that: “Wherever a company locates, if they bring jobs to our citizens, we all benefit.”

The communities that consist of “Op­portunity High Desert” are: Adelanto, Apple Valley, Barstow, Hesperia and Victorville.

OHD has experienced dramatic growth since its inception. Interested businesses and developers appreciate the value of meeting with an entire business-friendly region as opposed to meeting individu­ally with jurisdictions. As a result of the program’s success, the collaboration is expanding into other areas of govern­ment and may grow to include joint public services and other cost-sharing endeavors. OHD serves as an example for other regions in California on how collaborative approaches to regional economic development can be more ef­fective than locally sourced endeavors.

EIFDs: A New Economic Develop­ment Tool for High Desert Cities:

This shift in the High Desert Region complements new economic develop­ment tools such as Enhanced Infrastruc­ture Financing Districts (SB 628), which return the potential to secure and use tax increment to California cities and coun­ties (so long as school district property tax is not touched) and demonstrate a trend towards creating collaborative and sustainable funding mechanisms that promote cross-jurisdictional coopera­tion.

Enhanced Infrastructure Financing Dis­tricts (EIFDs), through SB 628, were signed into law on September 29, 2014. The new legislation provides legislative bodies such as cities and counties with a potentially powerful tool to assist in the economic development of their commu­nities. Similar to former redevelopment agencies, EIFDs can use tax increment financing (TIF) to fund projects or to pay debt service on outstanding bonds.

Unlike former RDA’s, EIFDs cannot collect tax increment from K-12 School Districts, Community College Districts or County Offices of Education, so the amount of tax increment generated by EIFDs will be relatively less. However, in addition to tax increment financing, EIFDs can draw from numerous funding sources such as Proposition 1 (a water bond of over $7.5 billion); cap and trade proceeds through the Greenhouse Gas Reduction Fund (estimated to provide billions of funds annually in the coming years); infrastructure user fees; Vehicle License Fee backfill; and private sector investment, among many other options.

EIFDs can use any powers enumer­ated under the Polanco Redevelopment Act, which permits EIFDs to engage in brownfield remediation, as well as ex­ercise eminent domain under specific circumstances. With such a broad array of funding sources, EIFDs are permit­ted to develop or implement a diverse array of projects with “communitywide significance that provides significant benefits to the district or the surround­ing community.” Various infrastruc­ture projects may be eligible, including storm water recharge and wastewater treatment, transportation infrastructure, as exemplified by public light rail and Bus Rapid Transit, affordable housing, childcare facilities, construction or ret­rofit of industrial structures, and open space, just to name a few.

Taking the High Desert Cities’ new col­laborative approach to development, EIFDs are one example of a regional economic development tool that exem­plifies a creative method of financing that the state has approved since rede­velopment dissolution. Victorville’s Southern California Logistics Airport, a long-term economic development en­gine, is just one project that could poten­tially receive funding through an EIFD.

Sustainable Economic Development without RDAs; A Bright Future for Cities & Counties:

Although California lost its most pow­erful economic development tool when Governor Brown and the legislature dis­solved redevelopment, new tools such as Enhanced Infrastructure Financing Districts demonstrate that there may be a viable economic development project financing program that would enable cities and counties to induce new projects that generate jobs and taxes. In addition to EIFDs, there is a variety of recently approved legislation that promotes eco­nomic development that reduces carbon footprint impacts and advances environ­mentally sustainable practices.

Propelled by these recent legislative ap­provals, the High Desert cities region, much like the rest of California, will soon be moving into a new era of “sus­tainable” regional economic develop­ment, driven by regional collaboration and sustainability, with an emphasis on infrastructure, which is motivated by a collection of creative and progressive new tools and regulations as listed in Figure 2.

Fig. 2 In the Wake of Redevelopment 2

As development expands beyond the In­land Empire, High Desert Cities should set their sites on regional collaboration such as the “Opportunity High Desert” initiative, as well as EIFDs, as a way to fund the necessary infrastructure im­provements needed to attract private investment that will, in turn, bring new jobs and revenues to the region.

General Transportation

Keeping the High Desert Moving in the Right Direction

Published by:

Ranchero Road Interchange

By Tim Watkins
Chief of Legislative and Public Affairs
San Bernardino Associated Governments

The San Bernardino Associated Govern­ments’ (SANBAG) commitment to the High Desert re­mains strong, as evident by four major transportation improvements that are currently underway. Navigated by the SANBAG Mountain/Desert Commit­tee, a sub-group of the SANBAG Board of Directors, made up of representatives from the municipalities in the Mountain and Desert areas, as well as two County Supervisors, these four projects repre­sent improved mobility, increased ac­cess to the region, better goods move­ment for the economy, and enhanced connectivity of the High Desert.

I-15/Ranchero Road Interchange, Hesperia

After two years of construction, and recovery from a construction-related fire in May of 2014, the Interstate 15 Ranchero Road Interchange, located in Hesperia, has opened to traffic.

Ranchero Road Interchange

Ranchero Road Interchange Concrete Pour

This interchange is part of a series of projects for the Hesperia area. The Ranchero Road Underpass (grade sepa­ration) to the east, combined with future improvements to Ranchero Road, and this new interchange will offer a much-needed alternative for area residents, saving commuters time and money from their daily travels.

The afternoon of May 5, 2014, offered the project team a seemingly devastating blow to progress when a construction-related fire engulfed the falsework that was preparing for the concrete pour of the new bridge. Swift response by San Bernardino County Fire, the contractor, and agencies like Caltrans and SAN­BAG, enabled the team to get traffic flowing on Interstate 15 again in about 24 hours. Good planning and coordina­tion moving forward allowed the team to get back on track to rebuilding the damaged area and, ultimately, deliver­ing this highly anticipated interchange in February, just four months from the original target date of completion.

This $59 million project adds a new bridge over I-15, provides congestion relief for the interstate and Main Street, improves drainage, and enhances safe­ty.

I-15/I-215 Devore Interchange Project, Cajon Pass

One of the more significant projects for the future of commuters through the Cajon Pass is the $324 million Devore Interchange Project that began in June 2013. SANBAG and Caltrans have partnered to deliver this innovative De­sign-Build Project that will reconfigure the relationship between Interstate 15 and Interstate 215, add additional lanes between the junction and State Route 138, introduce truck by-pass lanes, and reconnect old Route 66.

Devore Interchange

I 15-215 Devore Interchange Project

The Devore Interchange is one of the worst grade-related bottlenecks in the nation. Severe delays, with up to five mile traffic queues, are common for the more than one million vehicles travel­ing through the corridor each week. The Devore Interchange Project has been developed to reduce congestion, reduce accidents and improve freeway opera­tion.

For regular updates on the project, please visit the project site at www.de­voreinterchangeproject.com; or call the helpline at 855.415.4215.

Lenwood Road Grade Separation, Barstow

Lenwood Road is a major truck traffic connector route between I-15 and State Route 58 to the north of the Mojave River. SR 58 carries significant levels of truck traffic from central California through to I-15. This project is con­structing a grade separated crossing along Lenwood Road over the existing BNSF tracks. These improvements in­clude the widening of Lenwood Road from two lanes to four lanes between Main Street and Jasper Road.

Lenwood Road Grad Separation

Lenwood Road Grad Separation

Lenwood Road currently carries approximately 4,200 vehicles per day, including a high percentage of heavy trucks serv­ing commercial, light industrial and residential develop­ments. The prima­ry objective of this project is to improve operation and safety by ensuring prompt emergency response time to businesses and residents while eliminating the haz­ards and inefficiencies of trains passing through the flow of vehicular traffic. As a result, impacts to air quality are re­duced by eliminating the volume of idling vehicles.

Work is expected to be complete in the summer of 2015.

Yucca Loma Bridge over the Mojave River, Apple Valley

Construction of the Yucca Loma Bridge over the Mojave River, which also in­cludes improvements on Yates Road, started in January 2014. The bridge will connect Apple Valley on the east side of the river to Victor­ville on the west side. Ultimately, this corridor will provide easier access to the I-15/LaMesa-Nisqualli Interchange in Victorville that was opened to traffic in 2013.

The project team will build the Yucca Loma Bridge, widen Yates Road from two lanes to four lanes, install a new traffic signal at Park Road, and con­struct new soundwalls on the south side of Yates Road. The new bridge will also feature facilities such as Class II bike lanes, barrier protected sidewalk on the north side, and a barrier protected Class I path on the south side.

The total construction cost is estimated at $37.3 million. The project received funding from Measure I (the San Ber­nardino County ½ cent sales tax for transportation improvements), Town of Apple Valley funds, State Local Trans­portation Partnership Funds and Propo­sition 1B funds.

General Property

Comparative Market analysis: Does CMA accurately Price Property to Meet Current Market Demands?

Published by:

By Bob Thompson

We collect our just due when a listed property closes. We want to tell all that our “Marketing Plan” will save the day. But properties fail in droves especially in times where there is an excess of supply over demand. This is part 1 of a multi-part essay to look into the scourge of expiration, cancellation and withdrawal. The concluding paper offers a new method to price and manage listed property that moves the CMA into the background where it belongs.

An unmistakable outbreak of joy occurs all around when a property is listed. The agent is happy. He looks forward to future income as does the broker. The title company looks forward to a new policy and all the other vendors sense higher times ahead. The seller anticipates moving to the next stage of his life, hopefully with the proceeds of a favorable sale. Let us therefore, at least for a time, pass all secondary and collateral questions and consider the main subject of the present question. Will the property actually close and monies be collected? After all, in real estate transactions, money resolves all problems.

The main subject, then, is whether the property is priced to meet the demands of the current market. In attempting to prove the price is correct and worthy, the aware agent utilizes the tried and true comparative market analysis (CMA) due to the absence of any other dependable method for assigning a value to the property. The principle of the system is that the CMA process is accurate and reasonable. This premise is mainly false. The CMA has evolved into a patchwork method in which the users have limited experience in application and continuously fail to achieve the expected outcome because of known, unknown, and unanticipated independent variables.

Our business is a theatre which exhibits, in full operation, two radically different systems: the one resting on the basis of what we think is happening, and the other which is really taking place. We are experts on the first and painfully aware of the second, while our knowledge of this alternative reality and its workings is shallow indeed. The aware agent has learned that all things: demand, supply, condition, location, fear, and greed are accounted for by the CMA methodology and a little time and luck.

Lamentably, our CMA methodology falls short in times where the market becomes testy for the seller. When the supply side overwhelms the demand side, the Realtor notes that his time on the market (DOM) is increasing and his spirits falling as old man time moves along. The tick tick tick of the clock passing is really the drip drip drip of potential income leaking from his bank account. Worse, the seller, certain that his home is special above all others, insists he have his way and holds his price or offers only a meager discount after much anguish.

Oh so subtly, lurking in the background unknown to the agent, a hidden force is at work. This force creeps in by a side door and undoes the agent’s well thought-out pricing strategy. As the bard says, “It is not in the stars to hold our destiny but in ourselves.” We failed to consider the important issue of property symmetry in our original CMA estimates, and now it is one of the forces that will undo our best laid plan. Watch for part 2 in the next issue.

1 This assumes our listing agent has not sold out to the concept of the marketing plan overcoming inaccurate pricing.